Scottish retail sales trail UK

Between the first quarter of 2016 and the same period this year, the amount of goods sold in Scotland rose by 0.2 per cent, compared with British growth of 2.1 per cent.

Meanwhile, the value of shop sales north of the border grew by 1.8 per cent, while Britain saw a rise of 4.8 per cent.

The Retail Sales Index for Scotland is a measure of the goods sold by retailers in Scotland.

The latest Retail Sales Index for Scotland shows that the volume of Retail Sales in Scotland (i.e. the quantity bought) decreased by 0.4 per cent in the first quarter of 2017 (once seasonal effects had been taken into account), compared to a fall of 1.4 per cent in Great Britain as whole.

Commenting on the figures, Scottish Retail Consortium Director David Lonsdale said: “The improvement in the headline figure for the total value of retail sales in the first quarter of this year is encouraging at first glance, but it looks less rosy once falling shop prices are taken into account. Indeed shop prices have fallen each month for the past four years which demonstrates that retailers are having to work ever harder to maintain let alone grow sales values.

“Scottish retailers face a challenging trading period ahead. Rising commodity prices and changes in the exchange rate are pushing up import prices, the cumulative burden of government policies is mushrooming, whilst shoppers themselves are expected to keep a tighter rein on spending. Consumer spending, the mainstay of our economy, faces headwinds in the months ahead as household budgets contend with rising overall inflation and increases in council taxes. Higher statutory employee pension contributions are also set to take their toll on discretionary spending in each of the next two years.

“In the context of the UK General Election, Scottish retailers want to see policies from the political parties which keep down the cost of living, bolster disposable incomes, and help consumer spending take wing.”

Euan Murray, relationship director, Barclays Corporate Banking, added: “Increased supply chain costs and issues could go some way to explaining the falling figures in this quarter, from the bad weather in Spain affecting food imports to the weak value of Sterling, you don’t have to look far for a reason. The sector has also had the added pressure of a later Easter, which could have resulted in less consumer spend in Q1.

“Overall, consumer behaviour and their expectations are changing dramatically with many looking for brands to offer in-store ‘experiences’ and ‘entertainment’. Knowing what the consumer wants and how they want to buy it has become crucial.

“With 36 per cent of UK e-retail sales via mobile, retailers must invest in their online and mobile shopping platforms to improve the user experience and drive growth.

“However, with inflation in the UK set to accelerate faster than earnings growth for the first time since 2014 and consumers planning to spend less on every category with the exception of grocery, its looking like it’s going to be an uphill battle for the high-street.”